WSP12990

• File Number: 8282.750
• Description: California 4.4 or QSA or Water Plan
• State: CA
• Basin: Colorado Mainstem
• Date: 6/6/2003
• Author: Allen Matkins / David L. Osias
• Title: California 4.4 Plan / QSA / Water Plan - Background Information
• Water Supply Pro - Doc Type: Project Overview

Allen Matkin8 Leek Gamble & Mallory LLP
attorneys at law

Allen Matkins

501 West Broadway 9th Floor San Diego California 92101-3577
telephone. [phone] facsimile. 6192331158 www.al/enmatkins.com

memorandum

to. Interested Persons

writer. David L. Osias
t. 619 235 1526 e. [e-mail]
file number. 14161-o02/SD579390.01

date. May 25 2003
subject. QSA "Off-Ramp" Provisions

The term of the March 2003 proposed Quantification Settlement Agreement ("QSA"),
like the term of every earlier draft of the QSA, is expressly linked to the term of the IID/SDCW A
Transfer Agreement. The term of the QSA is governed by the following provisions in the QSA
and Related Agreements:

· QSA - Sections 1.1(23), (48), (62) and (63); 3.1; and 3.4.

· ECSA - Sections 4.2 and 5.7.

· IID/SDCW A Transfer Agreement - Sections 4.1(a) and (b); 7. 1 (b)(iii); 7.3;
8. 1 (b)(iii); and 8.3.

· Fourth Amendment - Sections 4.1(c); 4.2; 7.3; and 8.3.

IID/SDCW A Transfer Agreement and Fourth Amendment

Section 4.1(a) and (b) of the IID/SDCW A Transfer Agreement establishes an Initial Term
of 45 years anda Renewal Term of 30 years. Section 4.2 of the Fourth Amendment provides
that either SDCW A or lID may request renewal after year 38 and the other party must accept or
reject renewal by the end of year 40. In other words, mutual acceptance is required for renewal.
Section 4.1 (c) of the Fourth Amendment allows SDCW A to elect to terminate the lID/SDCW A
Transfer Agreement at the end of year 35 based on the outcome of negotiation or arbitration with
MWD to determine the cost of wheeling for years 31 through 45, with SDCW A required to
provide notice to lID by the end of year 15 if termination at the end of year 35 is being triggered.
This provision is a result of SDCW A and MWD being unable since 1998 to reach agreement on
the right and price of SDCW A to use the Colorado River Aqueduct to obtain conserved
transferred water in years 31 to 45.

I San Diego Century City Los Angeles Orange County San Francisco